Punitive Damages

Problem

While punitive damages awards are infrequent, their frequency and size have grown greatly in recent years.  More importantly, they are routinely asked for today in civil lawsuits.  The difficulty of predicting whether punitive damages will be awarded by a jury in any particular case, and the marked trend toward astronomically large amounts when they are awarded, have seriously distorted settlement and litigation processes and have led to wildly inconsistent outcomes in similar cases.

ATRA's Position:

ATRA supports state legislation that: establishes a liability “trigger” that reflects the intentional tort origins and quasi‑criminal nature of punitive damages awards ‑ “actual malice;” requires “clear and convincing evidence” to establish punitive damages liability; and requires proportionality in punitive damages so that the punishment fits the offense.   ATRA supports federal legislation that addresses the special problem of multiple punitive damages awards.  Such legislation would protect against unfair overkill, guard against possible due process violations, and help preserve the ability of future claimants to recover basic out‑of‑pocket expenses and damages for their pain and suffering.


Opposition Opinion:

The personal injury bar’s argument against punitive damages reform – that a jury should have broad discretion to award punitive damages in order to punish and deter misconduct – fails to address the quasi-criminal nature of punitive damages necessitating such procedural safeguards for the award of punitive damages as a showing that the defendant acted with “actual malice.”

Punitive Damages Reform: SB 482 (1995).

Oregon|1995

Requires 40% of punitive damages awards to be paid to

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Requires 40% of punitive damages awards to be paid to the prevailing party, 60% to the state fund, and no more than 20% to the attorney of the prevailing party.  Requires a plaintiff to show by “clear and convincing” evidence that a defendant “acted with malice or has shown a reckless and outrageous indifference to a highly unreasonable risk of harm and has acted with a conscious indifference to the health, safety and welfare of others.”  Provides for court review of jury-awarded punitive damages.  Bars the claiming of punitive damages in an original complaint.  Requires a plaintiff to show a prima facie case for liability before amending a complaint to include a punitive damages claim.  The split-recovery statute allocating 60% of punitive damages award to the state did not violate the right to a remedy, the right to a jury trial, the takings or tax provisions, or the separation of powers under the State Constitution.


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Challenged and Upheld

DeMendoza v. Huffman, 2002 WL 1827841 (Or. Aug. 8, 2002).

Punitive Damages Reform: SB 323 (1987).

Oregon|1987

Requires a plaintiff to prove punitive damages by “clear and

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Requires a plaintiff to prove punitive damages by “clear and convincing” evidence.  Provides an FDA standards defense to punitive damages.


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Challenged and Struck Down

The Oregon Supreme Court declared the $500,000 limit on noneconomic damages unconstitutional in the case of Larkin v. Senco Products, Inc. — P.2d. — , 1999 WL 498088 Or. July 15, 1999.